197 Mass. 194 | Mass. | 1908
This is an information in the nature of a quo warranto by the Attorney General against a railroad company owning and operating a railroad in this Commonwealth by virtue of its incorporation under the laws of the Commonwealth. It alleges that the defendant “ has directly and indirectly subscribed for, taken and held the stock and bonds and has guaranteed the bonds and dividends, and is guaranteeing the bonds and dividends of certain domestic corporations ” named, which aré
A demurrer was filed for four causes therein stated. Of these the third was waived, and the first and second are the same in substance; so that the two questions for consideration under the demurrer as stated in the defendant’s brief are: “ First, can the information, in the manner and form in which it is brought, be maintained as an information at the common law? Second, if the information can be maintained as an information at the common law, does it set forth facts upon which the judgment asked for therein can be rendered at the common law, or upon which any judgment at the common law can be rendered ? ”
Except for the alleged limitations in the statutes hereinafter referred to, no question is made as to the power and authority of the Attorney General to bring, in his own name and upon his own initiative, an information in the nature of quo warranto' against a corporation which has abused or misused its corporate franchise, or has usurped a franchise not granted to it, with such injurious consequences to the public as to justify a forfeiture of its charter. His general authority in this particular is well established. Goddard v. Smithett, 3 Gray, 116, 122. Attorney General v. Sullivan, 163 Mass. 446, 448.
The question raised by the first ground of demurrer depends, first, upon the fact that the acts complained of are such as might lawfully be done by a natural person, although ultra vires of the corporation and having no direct relation to the object for which it was chartered, and secondly, upon the further fact that under the statute such corporations are forbidden to do these acts. The Attorney General does not aver that the acts are of such a character as to require a forfeiture of the original franchise
Our statutes and decisions do not deal directly with this question, (R. L. c. 156, § 8; c. 192, § 6,) and the decisions that bear upon it in England and in other States are not uniform. In the English courts, such conditions wouid seem to call for an information in equity by the Attorney General, while in this Commonwealth, under the statutes existing when the cases arose, such informations have been sustained only in cases of public nuisance and public charitable trusts. Attorney General v. Tudor Ice Co. 104 Mass. 289, 244. Attorney General v. Pitcher, 183 Mass. 513, 520. Attorney General v. Great Northern Railway, 1 Dr. & Sm. 154. Attorney General v. Mid Kent Railway, L. R. 3 Ch. 100. It has been held in many States, sometimes under local statutes, that the exercise of powers by a corporation which are not authorized by its charter, but which do not affect the public interest so injuriously as to warrant an ouster from its corporate franchise, may be restrained on an information in the nature of quo warranto, to oust it from the enjoyment of the usurped franchise. State v. Portland Natural Gas & Oil Co. 153 Ind. 483. People v. Utica Ins. Co. 15 Johns. 358. State v. Standard Oil Co. 49 Ohio St. 137. Stewart v. Father Mathew Society, 41 Mich. 67. People v. Dashaway Association, 84 Cal. 114. State v. Norwalk & Danbury Turnpike Co. 10 Conn. 157. Illinois Midland Railway v. People, 84 Ill. 426. People v. North Chicago Railway, 88 Ill. 537. For a different view see State v. Minnesota Thresher Manuf. Co. 40 Minn. 213. Inasmuch as corporations derive their authority from the Legislature, they can exercise only such powers as are either expressly included in their franchise, or are fairly incidental to the enjoyment of it. An attempt to do that which is ultra vires is a usurpation of what would be a franchise if the right to do it had been granted. As was said by Mr. Justice Bradley in California v. Central Pacific Railroad, 127 U. S. 1, 41, “ Corporate capacity is a franchise.” So in People v. Geneva College, 5 Wend. 211, 218, it is declared that, “ Every act of a corporation affecting the public is the exercise of
Were it not for the St. 1906, c. 872, it would seem that, in a case like the present, the Attorney General might proceed by an information, and, if the unauthorized exercise of powers by the corporation was not of such a kind as to interfere seriously with the fulfilment by the corporation of the purposes of its creation, or to justify a forfeiture of its charter, he might ask for a judgment of ouster from the powers and franchises which it had exercised without right. Either such a remedy should be open at law, or it should be held that, since full jurisdiction in equity has .been given to our courts, an information in equity of the nature of quo warranto may be maintained by the Attorney General.
But we do not find it necessary to decide this question. For the St. 1906, c. 372, was passed for conditions of this kind, and it expressly covers all cases in which the assumption or exercise of a franchise or privilege, or the transaction of an unauthorized kind of business is not of such a grave character as, in the opinion of the Attorney General, to call for a forfeiture of the corporate franchise. The material part of this statute is as follows: “Upon an information in equity in the name of the Attorney General, at the relation of the commissioner of corporations, the Supreme Judicial Court shall have power to restrain by injunction any corporation from assuming or exercising any franchise or privilege or transacting any kind of business not authorized by the charter of such corporation and the laws of this Commonwealth.” The ease stated and the relief called for in the present information are provided for in this statute through an informa
We agree with the contention of the Attorney General that the St. 1906, c. 463, Part I. § 8, does not limit his authority to proceed independently-of action by the railroad commissioners in any case where the interests of the public seem to him to require it. This section is simply a detail in the statement of the general supervisory powers and duties of the railroad commissioners.
Demurrer sustained.